11 Facts About Stakeholder theory

Stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others.

One common version of stakeholder theory seeks to define the specific stakeholders of a company and then examine the conditions under which managers treat these parties as stakeholders.

In fields such as law, management, and human resources, stakeholder theory succeeded in challenging the usual analysis frameworks, by suggesting that stakeholders' needs should be put at the beginning of any action.

Concepts similar to modern stakeholder theory can be traced back to longstanding philosophical views about the nature of civil society itself and the relations between individuals.

Stakeholder theory followed this article with a book Strategic Management: A Stakeholder Approach.

Stakeholder theory instead argues that there are other parties involved, including employees, customers, suppliers, financiers, communities, governmental bodies, political groups, trade associations, and trade unions.

Donaldson and Preston argue that the Stakeholder theory has multiple distinct aspects that are mutually supportive: descriptive, instrumental, and normative.

Stakeholder theory succeeds in becoming famous not only in the business ethics fields; it is used as one of the frameworks in corporate social responsibility methods.

Stakeholder theory has seen growing uptake in higher education in the late 20th and early 21st centuries.

Political philosopher Charles Blattberg has criticized stakeholder theory for assuming that the interests of the various stakeholders can be, at best, compromised or balanced against each other.

Stakeholder theory recommends conversation instead and this leads him to defend what he calls a 'patriotic' conception of the corporation as an alternative to that associated with stakeholder theory.